The Economic Times, citing unnamed sources, reported that OpenAI is talking with Tata Consultancy Services (TCS) to develop AI compute infrastructure in India and co-create agentic AI solutions for enterprises. A partnership with TCS would mark the launch of OpenAI's Stargate India initiative and support TCS's aim to become a leading AI-driven services provider.
The report added that OpenAI had earlier explored a partnership with Reliance Industries, but the two companies failed to reach an agreement. Reliance has since strengthened collaborations with Google and Meta to build a 1GW AI compute hub in Jamnagar, Gujarat, along with AI service offerings.
Under a potential deal, OpenAI plans to lease at least 500MW of data center capacity from HyperVault, TCS's new data center unit, to train and run AI models locally. The companies are also exploring AI solutions for banking, retail, consumer goods, and manufacturing using advanced GPT language models. HyperVault, backed by a US$2.1 billion investment with private equity group TPG, aims to build gigawatt-scale AI-ready data centers through a 51:49 partnership.
Tata Group's total data center investment is projected at US$6.5-7 billion via debt and equity. OpenAI is expected to be a key tenant alongside hyperscalers, corporate clients, government entities, and Tata companies.
The TCS leadership team is reportedly in the US finalizing the commercial and operational details of the partnership, with a formal announcement targeted by year-end. The collaboration comes amid regulatory emphasis on local data residency, which OpenAI has implemented in other Asian markets, including Japan, Singapore, and South Korea.
India's data center industry is experiencing rapid growth driven by rising data consumption, AI adoption, and supportive government policies. Major investments in 2025 include Google's US$15 billion AI hub in Visakhapatnam, the Adani Group's US$5 billion partnership with Google, and Reliance Industries' US$11 billion AI data center project in Andhra Pradesh. Sify Infinit Spaces is also expanding its network of 25 data centers, planning an IPO of US$410 million to support further growth.
The country's data center capacity has quadrupled over the last six to seven years, reaching 1,263 MW as of April 2025, with projections to exceed 4,500 MW by 2030 and attract US$20-25 billion in investment. However, the sector faces resource challenges, particularly around power and water supply, which could affect the sustainability of large-scale AI and cloud infrastructure projects.
Article edited by Jack Wu
